Copper prices are receiving support from tightening London Metal Exchange (LME) warehouse dynamics and robust physical demand, according to ING analysts Warren Patterson and Ewa Manthey [1]. The analysts highlight a significant increase in cancelled warrants, which surged by more than 23,000 tonnes on Monday—the largest one-day rise since May—following ten consecutive sessions of declines [1]. Most of these cancellations have been reported in Asian locations, specifically Taiwan, South Korea, and Singapore, pushing the proportion of cancelled warrants to approximately 43% of total LME inventories [1].
This trend underscores strong physical demand for copper and ongoing shipment diversions to the United States ahead of the Trump administration's review of copper import tariffs [1]. Concurrently, on-warrant stocks have dropped to their lowest level since February, while total LME inventories have continued to decline for the 18th consecutive session [1].
The tightening of LME stocks and the surge in cancelled warrants suggest that the physical copper market remains robust, with inventory outflows reflecting heightened demand and potential supply constraints [1]. The anticipation of changes in US import tariffs is also influencing shipment patterns, further tightening available stocks in Asia [1].
CONCLUSION
Copper's market fundamentals are currently supported by strong physical demand and declining LME inventories, as highlighted by ING analysts. The ongoing reduction in available stocks and shipment diversions ahead of potential tariff changes point to a supportive environment for copper prices in the near term.